According to the company's third-quarter report, the company achieved operating income of 364 million yuan in the first three quarters of 2020, an increase of 8.26% over the same period last year; net profit of 58.6385 million yuan, an increase of-5.75% over the same period last year; net profit of 38.7296 million yuan, up-26.48% over the same period last year; net cash inflow from operating activities was 64.9627 million yuan, an increase of-7.51% over the same period last year.

Analysis and judgment:

E-commerce SAAS has a strong rigid demand attribute, and the impact of the epidemic is being repaired rapidly. The decline in revenue matching caused by cost rigidity and expanded investment is a drag on profit performance, and revenue and net profit in the fourth quarter are expected to show a significant improvement compared with the previous quarter. (1) E-commerce SAAS empowers small and medium-sized businesses, which is the key engine for small and medium-sized businesses to achieve sales through e-commerce, and the impact of the epidemic at the beginning of the year is being rapidly repaired. We note that the company achieved operating income of 337 million yuan in the first three quarters of 2020, an increase of 8.26% over the same period last year. Of this total, 2020Q1's revenue was 103.6495 million yuan, compared with the same period last year, which was 131.0049 million yuan, up 12.74% from the same period last year, up 14.22%. The company's revenue improved in the first three quarters compared with the same period last year, but Q3 decreased slightly compared with Q2, about 0.92%. The improvement in revenue in the first three quarters compared with the same period last year shows that the resumption of work and production after the brief impact of the epidemic is highly dependent on the rapid recovery of e-commerce. Considering that the domestic epidemic has been fully controlled, offline promotion and recovery and strong demand stimulation are expected to show a significant improvement in the fourth quarter. (2) the net profit does not show the same growth rate of revenue, which is mainly due to the slight decrease of gross profit margin, the increase of expense rate and the sharp increase of non-operating expenditure caused by donation. The decline of gross profit margin is mainly caused by profit-making sales and changes in product structure under the impact of the epidemic. The increase in the rate of expenses during the period reflects that the increase in costs caused by the company's expanded reproduction suffered the impact of the epidemic, which led to a decrease in revenue matching: the net profit of return to the mother in the first three quarters of 2020 was 58.6385 million yuan, an increase of-5.75% over the same period last year. The non-net profit deducted by the mother was 38.7296 million yuan, an increase of-26.48% over the same period last year. The net profit of 2020Q3 was 22.6487 million yuan, an increase of-15.31% over the same period last year and 18.22% over the previous year. The main reason behind the significant decline in Q3 net profit from the same period last year is that the overall gross profit margin decreased from 63.83% in 2019 to 63.73% in the first three quarters of 2020, and the rate of sales expenses increased from 16.34% in 2019 to 18.47% in the first three quarters of 2020., The rate of management expenses rose from 12.93% in 2019 to 13.69% in the first three quarters of 2020, and the rate of R & D expenses increased from 19.23% in 2019 to 22.07% in the first three quarters of 2020. In addition, the company incurred 660400 yuan in non-operating expenses due to donations in the first three quarters of 2020, an increase of 603.71 percent over the same period last year. (3) the net cash flow of operating activities in the current period is slightly lower than that in the previous year, which is mainly due to the increase in the amount of inventory, the amount of advance and the salary of employees paid in the current period compared with the previous period. (4) the social order of most parts of the country has basically returned to normal since July, and the impact of the epidemic has further subsided. In the case of a significant increase in the activity of small and medium-sized merchants, the demand for e-commerce SAAS will be significantly released, the offline promotion and operation of Guangyun technology in mature merchants and brand merchants is expected to be accelerated, and the matching of fees and revenue is expected to be repaired.

Investment suggestion

Guang Yun Technology is a rare e-commerce SAAS leader in A shares, and is expected to achieve a significant improvement in revenue and homing net profit in the fourth quarter. Considering that the company has found a high growth track such as mature e-commerce in-depth services and venture capital to share the value of Internet brands, the long-term prospects are promising. Revenue from 2020 to 2022 is expected to be 580,668 million yuan respectively. The corresponding net profit of return to the mother is 1.23 billion yuan, respectively, and the net profit is 145 million yuan. (the original forecast: the revenue of the company from 2020 to 2022 is 511, 588, 000.) However, with the decline in the company's stock price and the substantial progress in the establishment of a venture capital layout Internet women's wear brand, 175 times the 2020 homing net profit was valued, and the target price was adjusted from 52.41 to 43.75 yuan.

Risk hint

E-commerce platform depends on risk, the risk of business model change, the risk of brain drain and insufficient reserves, the risk of changes in the competitive pattern of e-commerce industry, industry policy risk, liquidity risk, systemic risk and so on.